ARM Wants You To Think It's An A.I. Company; It's Not
ฝัง
- เผยแพร่เมื่อ 7 ส.ค. 2024
- Get a 60-day free trial at www.shipstation.com/wallstreet. Thanks to
ShipStation for sponsoring the show!
On September 13th, ARM, the leading British semiconductor company, made significant waves in the market by IPO’ing at $51/share, swiftly soaring to a monumental valuation of $65 billion. As this year's most noteworthy IPO, ARM has been at the center of many financial discussions.
What We’ll Uncover in this Video:
A breakdown of ARM's impressive IPO details and its rapid climb in share price.
An insight into ARM's recent financial performance, including revenue trends and profit margins.
A deeper look at ARM's P/E ratio and what it signals for potential investors.
The bold claim by ARM of being a frontrunner in the AI landscape.
A thorough examination of the challenges ARM faces, especially in light of its revenue decline in the AI-dominated era.
With a valuation that seems to defy its recent financial trends, is ARM gearing up to be the next big tech disruptor? Or is there more to the story than what meets the eye? Dive in as we delve deep into ARM's potential and assess its standing in the ever-evolving tech landscape.
0:00 - 2:32 Intro
2:33 - 7:03 What is ARM
7:04 - 11:08 A.I. Hype
11:09 Arm China
Check out our second channel Broken Business Models where we discuss unusual or otherwise suspect businesses that may be unviable: / @brokenbusinessmodels
Email us: Wallstreetmillennial@gmail.com
Check out our new podcast on Spotify: open.spotify.com/show/4UZL13d...
All materials in these videos are used for educational purposes and fall within the guidelines of fair use. No copyright infringement intended. If you are or represent the copyright owner of materials used in this video and have a problem with the use of said material, please send me an email, wallstreetmillennial.com, and we can sort it out.
#Wallstreetmillennial #arm #nvda #ai #artificialintelligence
------------------------------
Buddha by Kontekst / kontekstmusic
Creative Commons - Attribution-ShareAlike 3.0 Unported - CC BY-SA 3.0
Free Download / Stream: bit.ly/2Pe7mBN
Music promoted by Audio Library • Buddha - Kontekst (No ...
------------------------------ - ภาพยนตร์และแอนิเมชัน
Get a 60-day free trial at www.shipstation.com/wallstreet. Thanks to
ShipStation for sponsoring the show!
You know it's a bubble when there's money to be made in pretending to be in that sector
Is it too late to invest in the crypto blockchain lawn mowing startup?
@@PedroOjedaNo that lawnmower ran on teraLuna try this NFT water company instead
We should invest in the right integration of systems where value is created for humanity
The problem is it is hard to time the bubble burst
@@robertburton432 That rules out your portfolio
To be fair, most of these AI companies are still fundamentally profitable electronics manufacturers and R&D firms. While they aren't worth what people are paying, they aren't zeros like crypto and collectables.
I hate to break it to you but AI companies are lots of zeros.
@@obsidianjane4413 Nividia, ARM, SenseTime, Amazon, Microsoft... Who else?
"Fundamentally profitable" is something you do not know, and makes you sound like a dummy, which you are not.
@@obsidianjane4413 Its on/off, or ones and zeros.
@@AndriasTravelsI think he's talking about companies like NVDA which is heavily benifiting from AI but is still a powerhouse in comercial and enterprise computing regardless of that, ARM is very similar in that regard.
Arm is an incredibly important chip designer, not an AI company.
Wells, to obviously, Are 😅Is so... Right 😅
Which can be easily substituted by a FREE product!!!!!
so is Nvidia.
they make GPUs not AI.
In the gold rush, the real winner is the one selling shovels not the gold miner.
In this AI rush, regardless they go bankrupt or not, every AI startup buy invidia
Most modern IPOs are designed to specifically exploit knowledge gaps in the wider investor community. They rely on ignorance to hype the product to the moon and convince investors that there is a marketable advantage to the company that simply isn't there. Tesla is the best example of this - exploiting retail investor ignorance of EV technology to convince them that a) Tesla is 'years ahead of their rivals' and b) Tesla has some kind of monopoly advantage in the EV market. Neither of these things are true, and once reality proves this to be the case, the stock will crater. Pay attention to how much energy the TSLA bulls put into perpetuating these two myths and you will see my point. But you can only distort reality for so long.....until POP.
These are all manias. We see it happen throughout history and it won't stop here. People will do anything they can to jump on the ship while it goes up telling themselves its not too late to join. Investing right now is more than reading the balance sheet; looking at trends and marketing strategies is what makes or breaks an IPO.
The sand I am selling from my backyard goes into making those chips … A.I. sand !!
Its hilarious how anytime softbank even dips a dollar into a company that company gets the kiss of death and something bad always happens to it
It's all the dirty House of Saud money.
And they always overpay.
yea...when they come and put $$ you better get them out
I'm a long time arm supporter but that's back when it was the Acorn Risc Machine. The fact that it survived this market so long by adapting business models is phenomenal but it's no longer that company and architecture created by a handful of brilliant engineers and businessmen... it's grown into a conglomerate of IP ... and RISC V is free and nice... honestly can't remember why I started this comment... i hate getting old...
ARM: Nvidia is one of our customers.
Investors: Say no more!!🤑
This is one of the best and easiest to digest channels I've across this year! This and ColdFusion are now my go-to channels for tech and general world information. Thank you for making this so easy to understand.
ColdFusion, Wall Street Millennial, and Patrick Boyle are the holy trinity.
@@MakerInMotionyes, yes, yes. I also like magnates for historical stories
@@MakerInMotionColdFusion actually just rips off other videos/documentaries. Swap them out with Peter Zeihan and you got a holy Trinity
@@MakerInMotionlike, they just stole the documentary Enron: The Smartest Guys in the Room to make their Enron video
If WeWork is AI, ARM also is AI 😂
ARM doesn’t have an LEG to stand on
ARM wont be able to gain market share in data centers because most of the software used doesnt support ARM's architecture . Also Microsoft are working on Windows that support ARM but this has been very slow and its been years now, its not their top priority. ARM cpu cores are very cheap in data centers but still many companies dont use them because of software compatibility.
This is totally false, all popular compilers and runtimes for cloud based applications support ARM. The main reason ARM is not more popular in the data center is that most devs computers are not ARM (until macbooks went ARM with the M1), it is a bit of a pain (but not super hard) to set up infrastructure that uses a different CPU architecture from your development machine.
It is also not an all or nothing to switch to ARM either, you can still run Intel x86/x64 on some servers and ARM on others if you really need to. So I don't accept this argument at all.
In my view we haven't gone ARM in the datacenter yet is that the cloud providers don't give enough of a monetary incentive to switch to their ARM servers, my guess is that they are waiting for the consumer laptop business to fully switch to ARM (when windows inevitably jumps on the bandwagon) and devs will just default to use ARM servers as well. Saving themselves from having to give deep discounts on compute costs. I also imagine that they want to slow down ARM adoption in the cloud until they can build enough ARM capacity in their datacenters, those Intel x86 CPUs that are already in place are not obsolete yet.
At my own job I did throw around the idea to switch to ARM AWS servers and we tried to estimate the savings and it wasn't enough to justify the initial effort or the possible incompatibilities we might have between development machines and server code. But we have fairly low traffic so our infra costs are not that high to begin with.
AWS ARM processors are designed in-house by Amazon, allowing them to tailor it to their use cases and cut out middle man between cloud-provider and foundry (TSMC, etc). Intel/AMD are doomed in the data center, they will probably start making ARM CPUs as well at some point having to license the instruction set from ARM. If this justifies the crazy valuation is out of my technical expertise though. No matter what they say the CPU costs for AI training model are minimal compared to the GPU costs (I am a web / devops engineer though, not data scientist/data engineer, so I could be wrong), but on the other hand normal compute demand will probably still grow at the same pace or even faster in the short and middle term future
I can't give investment advice, but I am not buying ARM stock because there are just too many unknowns on how the demand is going to be in the future, although I might buy it if there is a sudden crash and I can get it cheaper than current valuation (unlikely to happen any time soon due to all the hype)
Thinking about ARM as "chips for smartphones" is very much incomplete. Every car, every plane, every washing machine built today has with near certainty a chip in it which is based on an ARM design.
For ARM caring about AI is a legitimate necessity. Companies *want* to use ARM based chips which are good at running small AI applications on their devices. ARM caring about AI is not them responding to some hype, they are doing because people who buy arm chips want it for their applications.
Many, many areas where AIs could make predictions do not require GPUs, even low power CPUs can run AI aplplications, especially if it isn't real time. No arm cpu will ever run a language modell, but that isn't what ARM wants to do.
Compared to RISC-V (which only partially is even a competitor) it also an obvious competitive advantage to have fast AI.
@jonassattler4489 ARM CPUs could run AI applications , I believe there are some ARM based super computers built in more recent times although not for AI use cases as far as I know
It entirely depends on the application. But even tiny embedded chips *can* run neural networks, as long as the amount of parameters is small. Having a dedicated part of the chip for AI can make those networks faster and defining how that is controlled is pretty much exactly what ARM exists for.
Grace Hopper might be a beefy machine, but it seems intended for supercomputing applications rather than AI. The Grace SoC has 72 Arm Neoverse V2 cores (the latest gen tech from Arm), which is overkill for driving most AI applications.
Once they are free of Softbank's incompetent meddling, I think innovation will leap forward again. As a system designer, i can see where ARM may have strengths, that other companies do not; their expertise in low power is well ahead of any other company out there, and power consumption for data centres is one of the new frontiers.
RISC V will certainly come to take a lot of the low cost microcontroller market, but it's hard to build Billion Dollar revenues with 10 cent chips. The other AI use is edge computing in IOT devices, another area where they can excel. Thay are also big enough to be a major voice in IOT security: which might be a topic worth investigating for a future video, a lot of IOT devices are hacks waiting to happen, at the moment.
NVDA wanted to buy ARM for 80 billion in 2021 but got blocked by regulators… so there’s potential here
I'd still rather invest in overvalued arm than AI stocks.
The narrative that I had was more along the lines of.
If nvidia holds majority of shares in arm they can use it to extort us (says intel or another chip manufacturer)
So every Chip manufacturer/designer was prepared to overbid to protect there business interest
SoftBank... ... Nuff said
Id love to know what stocks you hold or short
Currently under $53/share right now 🙃
12:27 -I think you forgot to add the link. I don't see in the description :) (nor a Card or in the end slates)
I value this channel greatly for its insightful analysis. It has saved me a lot of money and I religiously watch every video the channel offers.
Yes, WSM nailed it. RISC-V for the long term. That is still in its infancy and there are issues to be worked out. But chips and computers based on RISC-V architecture are starting to appear on the market and are receiving favorable reviews, including the YT content creators. Again, with some issues to be worked on but no serious show-stoppers. The greatest challenge will be encouraging adoption by the app developers. Once the bandwagon starts rolling, it will be powerful.
This isn't realy the reason. Every mobile cpu producer wants part of arm. Because its dangerous for one of this companies the have majority in arm. For this very reason NVIDIA wasnt able to but it
Wow! Excellent Work Done here!
Saying ARM CPU is central to AI is like saying steering wheel is central to a car.
This is a Great Video with better information than all the other mainstream media has.
Great analysis. Let's see where this company is going and how their story isgoing to end.
40% hair cut in 9 months
Great video very informative, you should cover Meta more often
You need to do a remake for the arm china drama
Next Video - "Why Berkshire Hathaway is the biggest scam in the world" 😂
They literally aren't. And this company technically isn't a scam since what the CEO Rene Haas said was all technically true
ARM & NVIDIA are not AI but they provide strong hardwares for efficient AI systems.
9:10 Peak report analysis
You should make a video about the scooter company Bird
No mention of apples switch to arm on Mac?
@alexxu4508 No mention of Acorn computer switching to ARM in the 80s and spinning it off into it's own company or Apple using ARM in their Newton tablets in the 90s years before the ipod or iphone or ipad. Also Selling private equity shares in ARM in the late 90s is one of the things that helped save apple financially which is a little known fact compared to Jobs returning and releasing the iphone and coloured Macs with a new OS based on stuff from NEXT computer founded by jobs and acquired by apple
selling arm to softbank was a huge mistake. after the proposed nvida deal, many british engineers left seeing the writing on the wall. ARM is a US centric company now. no longer really british at all. it could be argued that ARM should have got into AI accelerators long ago, not just relying on the ARM instruction set efficiency. microsoft have been very slow and half arsed in having ARM as a viable truly native windows platform hampering sales. hyping the ARM instruction set as AI compatible is just marketing BS. charging more is a classic mistake. it will push clients to RISC-V. i really hope ARM gets it together as ive long been an ARM fan since the 1980s when i got my 1st ARM 2 computer!
yea...i agree...its a crime the UK GOV allowed such a pivotal company to be sold off..
The value of ARM is not the company, but their monopoly on the instruction set, their main way of making money by licensing it to other companies.
Much like Intel has been milking x86 instruction set for decades, ARM has an intrinsic value of the licensing model that the company can rely on.
You have a point that if they kept their technological chops they could have been the nVidia today, but, just like intel with x86, it can take decades to move on from instruction sets. Momentum towards ARM is just too strong for RISC-V to be a viable competitor in the mass consumer market and datacenter for at least for a few decades
Looking forward to the “Collapse of Shipstation” video.
I can’t believe that they aren’t valued higher considering they power the entire mobile industry and are making moves in the desktop and supercomputer space
A very good video. If this video saves investors from being sucked into an overpriced investment, it will bring the creators good karma. This is a video that needs to be shared with many given the precarious state of financial markets.
It's now trading around 158 with the PE ratio of almost 600
When their bubble pops and puts them at a 25B valuation I won’t mind investing. Now I was going to but nah.
ARM's revenues are in the low billions. Impressive by most measures, but their market cap is so far removed from fundamentals that it will never live up to the hype. The price to revenue numbers mean that it should grow by 8 revenue by times in the next 10 quarters. If it was an AI company, and if AI hype was real, then you would have seen a huge bump in revenue 3-4 quarters ago. The big companies plan things at least 3-4 quarters ahead of time so chip orders would have come in by now.
The CEO will probably get a FAT bonus for his spin
I think that you really mean to say cores when you say chips.
As far as long term good Softbank is this case is laughing all the way to the bank
Thank you. Maybe I buy in 2025 some Arm shares
Awesome
Everything is nice but softbank sh tty hands ruins everything.
A.R.M is as A.I as a lemonade stand.
Sounds like a whole bunch of people who missed out on NVDA and SMCI complaining about missing out on ARM by investing in a rear view mirror. Its a massive buy for me.
I love my Arm processors
How can any company justify a P/E over 25 (let alone above 100!!) when US Treasury bond yields are 5.5%?
Thanks for mentioning RISC-V here. The reality is that ARM is a dead man walking because of it, but it will take ~5 years before ARM loses meaningful market share.
$65 vs $52 now
I like this channel for the insight, but if you listen to them for investing advice, especially on AI, you're missing out on the returns this past year.
share price already ate shit since.....5 days ago. -25% lol
There not not an ai company
PUTS!!!!
There's more dumb money on the other side outlast you.
They especially wanted to IPO at the top...
My bicycle is AI too!
Shorttt
Every gpu does not need a cpu. you can run multiple gpu's on a singe cpu. if you re strictly making cpu's you really aren't going to benefit as much for AI like you would if you are making gpu's or dedicated ai hardware.
ARM isn't even really a semiconductor company either. It's an intellectual property company.
The mistake is. What we call "AI" literally isn't AI, it's the same thing we've had since punch cards, algorithms
Why should anyone invest in a company that means "poor" in german?
Haha, they have multiple companies that are set up to get you off your dinky ARM phone and onto a NVidia monster, so that you can make AI.
Arm is antiquated and unnecessary, which is why it was sold to dumb money. Nvdia is being used in more than graphics cards. Nvdia is going to play a much bigger role than what is publicly known.
Too Many Chiefs and not enough Indian's.
who is here after they purchased arm before earnings? ME
It’s crashed down to $52. Honestly they’re a $20-25$ a share company. Realistically, $14.
Been buying puts on them plan to add more
It’s a patented math equation. I’m still buying the stock.
*Overpaying for the stock.
They should have stayed as UK company and its a crime the UK GOV allowed such a pivotal company to be sold off... we lost a big opportunity as a country! Now its a clown pretending to sell AI
Apple has already developed their own competing chips.
Intel is developing their own as well.
Everybody wants a piece of the CPU/GPU market because between bitcoin mining and AI (both very heavily dependent on processors) there will be huge demand for chips.
The GPU is what we used to call a math co-processor. It's a high speed math unit.
That sponsered ad of yours sounds like a scam by itself. Funny.
i will buy intel over nvidia and AMD. and i will buy texas instruments over ARM. maybe some day that will change. but not for now.
None of these companies are AI. And the already established tech companies will dominate.
This IPO is a rug pull
no, it is just big dog making money then it will stabilize lower
@@Kabodanki you just described a rug pull
@@sephiroth7023 Rug pull refers to pump and dump scams. This is technically not fraud
@@sephiroth7023 Yh I noticed that too , pumped up the price within hours of the IPO then institutional investors sold off and it dipped downwards
I liked ARM - back in the day I had a RISC PC, and its performance vs contemporary intel products etc was incredible. I lost touch with them, and the curse of SoftBank happened...
@jonathanj8303 Acorn computers shutting down and spinning off ARM was a questionable decision in the 1st place as far as i'm concerned , a lot of ppl act like there's something wrong with ARM that made it unsuitable for desktop use until Apple switched to ARM in 2020 when ARM CPU's was used by Acorn computers in the 80s and 90s
An ACTUALLY GOOD sponsor, nice job 👍👍
ARM shot themselves in the foot with the licensing deals being structured to charge per core... Why make a multi core ARM CPU if it's going to cost you say 4 times more, 8 times more, 16 times more? So everyone is incentivized to make the shittiest least powerful single core CPU. ARM screwed themselves big time.
@s6e45gv46 I think the thing is companies licensing ARM's semiconductor IP have no choice because most devices in the modern day and age will not be using a single core unless the design intentionally want worse performance and security risks. Multiple cores will most like comes with various bells and whistles like integrated bluetooth , wifi , more cache and better power consumption than an older single core design. Plus they will intentionally discontinue older CPU designs thy don't want to support forcing licencees to upgrade
A.I. is over used , overstated and the vast majority having no idea how it works. Arm is cpu and most ai is done by gpu and if you have the cash tensor cpu. Arm is competing against the likes intel and amd in this field and unfortunately no one gives a hoot about energy efficiency just work through put. Amd is king atm with everyone playing catch up. The issue with Nvidia is the software used for ai (cuda) is very well established and currently their is no real competition. Fun fact for those who have a tesla, it utilizes a Nvidia gpu for one of the models.
Arm means poor in german and german is the best predictor of stocks. So dont invest.
Another day another con
things seem to have been going downhill for ARM pretty quickly since they became public
Im buying ARM. Call me a fool but i like AI
Name one laptop that uses an arm based processor, I'll wait.
there's too many to mention
The "AI Bros" are the new Crypto Bros. But it's so much more weirder. It's like a technological cult, and AI is a fix-all solution for every problem in society
The ARM china situation is just a beautiful example of the Monkeys paw which is relying on Chinese markets. I cannot imagine something like that happening in even other hostile places like Russia. I can foresee a truly terrible tech crash occurring when China’s homebrewed tech finally catches up to the west.
$51 not $65, your skills are bollox